SpaceX earnings, Super Micro forecast lift AI stocks as Wall Street rallies

The Dow gained 1% on Tuesday, while SpaceX reported its first quarterly profit as a public company and Super Micro raised its revenue outlook on strong demand for AI infrastructure.

US equities closed mostly higher on Tuesday, 20 October, as gains in healthcare and other sectors helped offset weakness among major technology stocks. The Dow Jones Industrial Average rose 1.02% to 52,495.88, while the S&P 500 gained 0.28% to 7,712.57. The Nasdaq Composite slipped 0.02% to 26,424.82, according to Associated Press market reporting.

Healthcare shares led the advance, while technology stocks weighed on the broader market as investors assessed the sustainability of spending on artificial intelligence. Oil prices retreated from earlier highs amid reports of possible diplomatic progress involving the United States and Iran, although geopolitical uncertainty remained. The market’s mixed performance suggested that investors were responding selectively to earnings and sector-specific developments rather than embracing technology stocks across the board.

SpaceX reported net income of $4.4 billion for the third quarter of 2026, with revenue reaching approximately $14.6 billion, according to the Associated Press. Revenue rose 161% year on year, supported by satellite communications and its expanding artificial intelligence computing business. The results marked a significant turnaround from a loss in the year-earlier period.

The results also drew attention to the scale of SpaceX’s investment in computing infrastructure. The company reported capital expenditure of about $19.6 billion in the quarter and indicated that spending could rise to between $35 billion and $40 billion in the following quarter. Such investment reflects the growing infrastructure requirements of AI services, although the eventual returns will depend on demand, utilisation and the ability to generate sustainable revenue.

Elon Musk also disclosed that SpaceX and Tesla had formed special committees of independent directors to explore a potential merger. The committees are examining the possibility; no completed merger has been announced. Musk said his position as chief executive of both companies creates a conflict that prevents him from participating directly in the committees’ discussions.

The prospect of combining a space and satellite communications business with an electric-vehicle manufacturer has attracted investor attention because of their overlapping interests in AI, computing and advanced technology. However, a possible transaction would raise substantial questions about valuation, governance, financing and shareholder approval. Until further details emerge, the merger remains a proposal under consideration rather than a confirmed corporate transaction.

Super Micro Computer, a supplier of servers and data-centre infrastructure, provided another sign of strong demand for AI hardware. In a preliminary business update published on 20 October, the company estimated first-quarter fiscal 2027 revenue at between $18.5 billion and $19.5 billion, up from its previous guidance of $14.5 billion to $15.5 billion.

The company attributed the stronger outlook primarily to increased demand for AI platforms. It also raised its estimated gross margin range to 12%–12.5%, compared with previous guidance of 10.4%–10.8%. Super Micro emphasised that these are preliminary estimates, subject to revision as it completes its financial reporting process.

The announcement sent Super Micro shares higher in after-hours trading and supported other server manufacturers, including Dell Technologies and Hewlett Packard Enterprise. The reaction indicates that investors are closely monitoring orders and revenue forecasts across the AI infrastructure supply chain.

However, stronger hardware demand does not automatically establish that all AI-related investments will generate attractive returns. Investors have also raised concerns about the high capital requirements of data centres, financing costs and the time needed for operators to translate infrastructure spending into profitable services. The next stage of the AI investment cycle will depend not only on hardware sales but also on customers’ ability to monetise computing capacity.

Netflix reported third-quarter revenue of approximately $12.87 billion, up 11.8% year on year, according to Reuters. Revenue was broadly in line with market expectations, but the company’s outlook for the fourth quarter was weaker than expected, and its shares fell in after-hours trading.

The reaction illustrated the market’s focus on forward guidance as well as reported earnings. Companies can deliver growth and still face share-price pressure when investors believe future performance may fall short of expectations.

Tesla and Meta Platforms were among the major companies scheduled to report results on Wednesday, making their revenue outlooks and AI investment plans important potential drivers of market sentiment. Meta’s spending guidance will be particularly relevant to investors assessing whether large technology companies can justify their infrastructure commitments with future growth and returns.

The latest session offered a mixed picture. The Dow and S&P 500 advanced, but the Nasdaq remained under pressure as investors weighed the prospects for major technology companies and the broader AI trade. Strong results from SpaceX and an improved preliminary outlook from Super Micro provided positive signals for parts of the AI ecosystem, but they do not resolve questions about valuations, financing costs or the long-term profitability of AI infrastructure.

For investors, the coming earnings announcements will help determine whether strong demand for computing capacity is translating into durable business growth. For the market as a whole, the balance between corporate earnings, geopolitical developments, oil prices and interest rates is likely to remain important.

Sources: SpaceX official quarterly results; Associated Press — SpaceX earnings and potential Tesla merger; Reuters — SpaceX revenue growth; Super Micro Computer official preliminary results; Reuters — Super Micro revenue outlook; Associated Press — US stock-market closing figures; MarketWatch — SpaceX earnings.